Heartwood Wealth Management Limited

The Client

Heartwood Wealth Management ('Heartwood') originated in 1988 as a financial services business providing investment and wealth management to individuals, families and charities. Heartwood significantly enhanced its investment management offering and increased the team from 2008. In March 2011 Heartwood Investment Management was officially launched as a distinct division of the business marketing its stand-alone investment management services.

Heartwood Investment Management is a global multi-asset class investor, managing portfolios on behalf of Heartwood Wealth Management's private clients and offers its investment management services directly to charities, individuals through professional intermediaries, and institutions. Heartwood’s success is evident from the significant organic growth achieved in recent years and the company now have more than £2.3 billion of client assets under management and administration.

The Challenge

Heartwood acts as both fund manufacturer (with Capita as the Authorised Corporate Director) and as fund buyer, dealing into the CF Heartwood fund range and other OEICs. The number one priority was to automate fund dealing into the CF Heartwood range. Secondary benefits emerged during the on-boarding process and Heartwood is now dealing with a dozen fund managers via Calastone, both onshore and offshore.

Why did you select Calastone, rather than any of our competitors?
The ability to connect to the network quickly at minimal cost offered us immediate payback for no capital outlay. Because Capita was already a Calastone participant, it was easy for us to improve our STP rates and reduce the cost and risks of trading.

What were Heartwood’s concerns?
None really: Capita were already on-board and this made it easy for us to deal into the CF Heartwood fund range which in turn has improved our operational efficiency.

How many fund trades do you place in the market on an average day?
Fifteen to thirty

What percentage of these trades was automated?
None fully although 35% approx were semi-automated.

Calastone’s Solution

How much did it cost to implement Calastone?
To date, nothing: we opted for the EMS file upload solution which has enabled us to connect very quickly, our only cost being time. We have however a small internal project to extract a file from our order management system that will deliver full STP internally.

You are now trading in the market using Calastone to host your SWIFT BIC. What operational benefits has this delivered?
Orders are not re-keyed or relayed by phone or fax which has improved time to market, reduced costs per trade, reduced risk and improved scalability.

Do you envisage that you will expand your use of Calastone’s services in the future?
Yes... we are actively looking to connect to the main fund providers in order to realise the advantages of STP. We are also keen to use the settlement and reconciliation modules where possible to improve our manual processing procedures.

How long did it take to go-live?
Once the due diligence had been completed and the decision had been made to connect to Calastone we went live in approximately four weeks.

How much money do you now save as a result?
In the first five months of transacting our order flow via the Calastone Transaction Network, we saved more than £12,000. The average cost per trade has reduced by 68.7% and we have experienced zero errors. This contrasts with the past where we had incurred some small losses resulting from manual order entry.

The Outcome

Are you happy with the end result?
Heartwood is continually looking for ways to improve order flow processing for our fund transaction processing. Calastone’s ability to connect the entire funds market without having to invest in costly technology infrastructure not only brings us cost efficiencies but also increases STP levels significantly. We have been impressed with the ease of connecting to Calastone’s single pipe and with the testing and implementation environment provided by the Calastone team.

The Future

Where did you hear about Calastone?
We picked up on some press coverage and decided to investigate further, the rest as they say... !

How do you see the UK settlement landscape evolving over the next two years?
Initiatives like Calastone’s order-routing, settlement and reconciliations services will make dealing and settling mutual funds as easy as any other asset class. Reduced costs and improved STP will bring operational efficiencies which offer the foundations for further consolidation for clearing and settlement across Europe.

With thanks to Paul Roberts, Heartwood’s Associate Director of Operations

For further information contact sales@calastone.com